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Will Autodesk (ADSK) Miss Earnings Estimates?

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Autodesk, Inc (ADSK - Analyst Report) is set to report fourth quarter 2013 results on Feb 26. Last quarter, it posted a 14.8% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Autodesk’s third-quarter result reflected improving demand environment in the AEC market. The company has significant growth opportunities in the AEC and manufacturing markets going forward.

Autodesk believes that the momentum from the BIM product portfolio will help it to penetrate the construction industry faster, which is a $7.0 trillion market. We believe that Autodesk’s new cloud-based offerings are gaining traction.

Moreover, the company’s focus on expanding its mobile applications for both Apple’s iOS and Google’s Android platform will further drive market share, going forward.

However, a sluggish macro-economic environment, weakness in emerging markets, customer concentration and increasing competition from Adobe Systems Inc. are the major concerns. Moreover, continued investments in new products are expected to hurt margins in the near term.

Earnings Whispers?

Our proven model does not conclusively show that Autodesk is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 21 cents. Hence, the difference is of 0.0%.

Zacks Rank: Autodesk’s Zacks Rank #3 (Hold) when combined with an ESP of 0.00% makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

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